tv First Business FOX November 7, 2012 4:00am-4:30am PST
election. in today's show-- election reaction from main street to trading floors. how to prepare your portfolio for the "next" 4 years. plus, why the obama win could cause angst for some money managers. yet another uprising rocks greece. and parts of the north east brace and evacuate ahead of a storm. first business starts now. you're watching first business: financial news, analysis, and today's investment ideas. good morning. it's wedensday, november 7th. i'm angela miles. in today's first look: election 2012 turned into the
money battle of the century. 6 billion dollars later, networks are projecting the democrats remain in control of the senate, republicans will run the congress and president obama retains the white house. while our journey has been long we have picked ourselves up, we have fought our way back, and we know in our hearts that for the usa the best is yet to come. i have just called pres obama to congratulate him on his victory on election day the dow surged 134 points, the nasdaq up 12 and the s&p 500 up 11. gold and oil also rallied.. with gold continuing to add on another 8 dollars last night.. while oil pulled back a few cents after ralling more than $3 during the regular session. also making news-- united is canceling 500 flights in the north east ahead of a storm
that is expected to hit parts of new york and new jersey already devastated by superstorm sandy. mark sebastian of option pit mentoring gives us our first look at the trading day, and what do you anticipate on this post-election day mark? > > well, president obama won, so let's look at what his policies are really going to do. i think he's a weak dollar president. so what does that mean? gold is going to rally, commodities are going to rally. i think you will still have people searching for yield, so the stock market is going to rally. we will see a big sell- off in the vix, and we should see a sell-off in the u.s. dollar as well. > > what do you think about gold and oil here? yesterday they both ramped up. > > we saw both buying ahead of an obama victory. there is a strong belief that gold could make an end-of-year run through its all-time highs toward that $2,000 level. oil is a little more demand-centric, so
expect it to test $90, maybe $95 in wti, but i doubt it's going to be testing new highs toward the end of the year. > > as you know, consumer confidence is up. we have retailers reporting earnings this week. is this a time to buy retail stocks? > > i think you have to be smart about which ones you buy. i think the big domestic department stores, there are winners and losers, and then in the individual lines there are winners and losers. lululemon continues to outperform. gap continues to underperform. you have to be smart about who you by and for what price. > > mark sebastian of option pit mentoring. thanks for being on the show today. > > thank you. moments after networks announced that the president had won ohio---more than 16-thousand barack obama supporters gathered in chicago, went wild. "i believe that there are no red states or blue states but the united states and with the grace of god, we will move forward." news reports highlighted that
after a record six billion dollars spent on campaigns for congress, senate and the presidency--the balance of power is the same between democrats and republicans as when the day began. "i just want them to cooperate a little. they haven't done it at all." "we look to democrats and republicans to put the people before politics." but gov. romney's campaign resisted concession of ohio...hoping the final margin of victory would be within the number of provisional ballots yet to be counted. a long night
might follow what had been a long day nationwide. in new jersey for example, despite power restored to most polling places after last week's superstorm, so many voters had problems that election officials extended voting by email to next friday. in pennsyvania, voters waited two houirs in lines and in some places, poll workers reportedly demanded more from voters than the law required. "poll workers were asking for id and if they didn't have it they were turning people away if they didn't hyave theier photo id." election protection, a nonpartisan watchdog group says it received roughly 75-thousand calls across the country from individuals having problems voting. long lines were a common complaint in ohio and illinois. "omg, it must've been hundreds because it went all around the corner." "while each of us has our own individual path to follow, we are one family and we rise as fall together as one people." one trend that's emerged--early
voting. more than a third of all votes cast were on ballots filled out before november 6th. in north carolina--two-point- eight million voted early--most of them democrats. though romney won north carolina in ohio, one-point-seven million voted--more of them democrats. and florida--four and a half million voted early-- more democrats than republicans. top greek officials plan to push tough new austerity measures through parliament today, and it's not sitting well with the masses. hundreds of thousands of greek residents are on a 48- hour strike to protest the latest round of wage and pension cuts. they are protesting against the measure they say penalizes the poor while sparing the elite. prime minister antonis samaras needs the $23 billion in budget cuts to secure bailout money from eurozone leaders. oil refineries are struggling to
recover in the wake of superstorm sandy. phillips' 66 new jersey refinery remains closed. the operation needs 2 to 3 weeks before it's back in business. other east coast refineries, including port reading and philadelphia energy solutions, are running at lower capacity. several smaller refineries on the east coast are back to work. however, gas supply problems persist in new york and new jersey. aaa says this week between 60 and 65 percent of gas stations in new york were back open. in new jersey, between 55 and 60% were reopened. an investigation is under way in new york into price gouging in the wake of superstorm sandy. the new york attorney general has received hundreds of consumer complaints, ranging from pumped-up prices on gas, to generators and hotels as well as food and water. the ag says price gouging during natural disasters is against the law. meanwhile, new jersey governor chris christie is updating residents about problems at the pump.
"gasoline, we're seeing positive results from our odd/even system. i was reluctant to go to the system until we had to. i will tell you that for the most part it has significantly diminished lines across the state, if not eliminated them." christie ads the federal government will provide 500 buses for commuters this morning. hurricane sandy swept away $4 billion in retail sales last week along the east coast according to mastercard, which makes up about 24% of retail sales nationwide. typically retailers should have generated nearly $19 billion in sales. the number came in at $15 billion last week. power outages, flooding, and gas shortages are all stalling sales in the area. eager buyers continues to be the key behind rising homes prices. the latest numbers from corelogic show home prices jumped 5% in september compared to a year ago, the biggest rise in 6 years. the 5 states with the largest leaps in home prices are arizona, idaho, nevada, hawaii and utah. one
caveat: prices nationwide did decline .3% from august to september. according to corelogic, it's because of an end-of-summer slowdown in housing sales and not signs of a slowdown in the recovery. job openings fell to a five- month low in september due to uncertainty in the u.s. jobs market. the number of open jobs dropped 100,000 to 3.5 million, according to the u.s. department of labor. the economy is growing, but job growth is slow. although october payroll figures were the highest in eight months, companies want to see if the growth continues before hiring more workers. eastman kodak won court approval to cut benefits for 56,000 retirees as part of its chapter 11 restructuring. it will mean $10 million in savings. retirees and medicare recipients fear the loss of benefits, but kodak says the move is legal. by the end of the year, worldwide layoffs at the company will reach 4,000 workers. a weight-loss drug is losing
support. pharma company vivus says its weight-loss drug qsymia does not have enough support from insurers, and that is forcing nearly one in five patients to say no to the drug. vivus reports in the third quarter the drug generated only $41,000, down substantially from the $310,000 projected. shares fell 26% yesterday, closing near 11 dollars. in july, shares hit a 15-year high of 31 dollars. in earnings news, aol posted a 7% increase in profits, mostly from ad sales. it's the biggest gain in months. the company expects further growth in 2013. sales fell 11% at express scripts. the prescription company blames overly aggressive estimates and the economy for an earnings miss. office depot and office max had slow third quarter sales, but both stocks rallied on rumors the two will merge.
and weight watchers stock gained 16% after the company topped estimates. it's prime time at amazon. amazon will begin testing a new price plan for its movie and tv streaming, known as its prime service. amazon plans to charge $7.99 a month for prime. customers used to pay $80 per year, similar to its competitiors netflix and hulu plus, which will continue charging $80 a year. out of fear booze will get a bad rap, anheuser-busch wants the film studio behind the movie "flight" to remove budweiser logos. the film "flight" features denzel washington as an airline pilot who is a heavy drinker. the vice president of bud sent a statement to the associated press saying the brewing company was never contacted by paramount for permission to use the beer in "flight." there's no comment from the director.
w the election is, obviously, over. let the heavy lifting begin. the president and congress now have a lot of work before them, not the least of which is that darn fiscal cliff that comes up at the end of the year, which, by the way, is less than 2 months off now. let's talk with author and finance columnist gail marks jarvis. you've been assessing the work ahead, and it's all about taxes and spending. you can't avoid it now. you've got to start making some decisions it seems. > > and the clock is ticking. so even though we may have this happy time after the election
where we're feeling relieved, that relief isn't going to last long, because come december, the end of december, a huge change comes upon us. taxes are automatically going to go up about $500 billion, and the government is going to start slashing spending. they don't have a choice, unless congress steps in and takes action to stop it. > > we've seen by their past behavior that that's not likely to happen. there are economists, as you well know gail, who say we should just drive off that cliff, and in the ensuing chaos find some compromise there. > > this is what the chaos would look like: all of a sudden, you would go to your paycheck, and you would say, "oh my gosh, what happened to my money? my taxes went up." and you'd maybe cut back on your spending. and the economy, according to bernanke, would start to slow so much that we would go into another recession. and the idea is that the politicians then would have cover, because everyone would be scared that a recession is coming again. the politicians could step up and do the things
that their constituents normally wouldn't want them to do. > > it's amazing how cynical that is. > > so cynical. > > medicare, social security, these too need addressing pretty quickly. > > that's coming. because anyone who thinks that you can deal with the kind of debt issues that this country has simply by raising a little tax here or cutting a little spending there, it just won't work. we're talking about probably tax increases across the board, we are probably talking about a lot of government spending, not just getting rid of a little waste. > > get the meat axe out. > > exactly. and social security and medicare eventually have to be touched, because they are a huge part of the budget. > > gail marks jarvis. thanks so much. > > thank you. thank you bill. still ahead, what stocks did traders rally to during the campaign season? find out next.
some traders and portfolio managers may find themselves scrambling with post-election stock positioning today. tim biggam of trading block joins us now with a look at some stocks that have been in play during this year's election season. hi tim, and will you be doing some adjusting today? > > absolutely, and putting some money to work i think is more likely the case across the
board. i think myself and most portfolio managers and investors have probably remained somewhat sidelined in front of the election, just waiting to get a little bit more clarity about how things are going forward. now that we have a little bit more of that clarity, i think investors will put a little bit more money to work regardless of whether it's in growth or value going forward. > > what trading themes did you see emerge during the election season? > > it really came down kind of to that almost binary growth- verses-value. early on when obama seemed all but certain to be the president, we saw stocks like apple and gold, the free money, kind of high-beta names, taking off and really starting to outperform the market. once romney closed the gap toward the end of the election, we saw those very same names come in and some of the value stocks kind of trickle up here. so, we saw that convergence going forward. i think we may see growth maybe take a little bit more of a leadership role here. apple is a stock i like certainly, and i do like gold, given the performance over the
past couple days. > > what stocks remain solid long-term buys no matter who's in office, in your mind? > > i still like the utility stocks here. they have been beaten up - one of the worst performing sectors of the year. i think they're kind of a little bit of the redheaded stepchild of the room given the fact that they had exposure both to nuclear, which no one liked, and also the fact that there was some chatter obviously with a dividend rate increase going forward. so, utility stocks have been a big underperformer because of that. as a contrarian, i like them going forward. a name like exelon, which is the cheapest of its peer group because of that nuclear exposure, i really favor here. > > other than exelon, anything else there that you really want to buy from here? > > i think adding some gold here, given the correction. we hit below $1700, charged above it yesterday. i think gold may have put in a short-term low here, and i think for anyone who doesn't have gold in their portfolio, certainly it's
trading at the cheapest it has almost since the beginning of the year, so, not a bad time to be adding a little of the gold to your portfolio to hedge things. > > good to have you on the show, thank you very much. it's tim biggam of trading block. > > thank you angie. still ahead, the bigger picture. what traders are watching for in the stock market post-election. that's next in chart talk.
morning with dan deming of stutland equities. good morning to you dan. > > morning angie. > > what are you seeing in the charts that's catching your eye? > > there's a few things out there angie that caught my eye over the last week or so. we saw kind of this bottoming out of the s&p just above the 1400 level. yesterday we saw the s&p go back up and test that 50-day moving average around 1435, so just below there, but nevertheless pressing up against that 50-day moving average. it looks like it potentially is putting in a bottom here just above 1400. the other areas i'm kind of watching are the smh, which you're now seeing push above its 50-day moving average and a pretty sharp move higher yesterday, and the xhb, the housing sector, the home builder sector, showing continued strength throughout all of this kind of dislocation in the market the last week- and-a-half. > > does this mean you're looking for a breakout in the
market, in the charts here? > > it feels kind of like it wants to break out angie. i can tell you from the vix standpoint, trading in the vix, we're seeing a very interesting thing taking place where the futures are trading well below the cash. that's typical when you see the vix up around 20 or higher. very atypical when you see the vix down around the 17 level. we saw the future trade close about 60¢ below cash yesterday in the 17 range. i don't think i've ever seen that in the four-and-a-half years i've been trading in that product. so, very unusual situation tells me that there's the sellers of the future and the vix, which is indicating the possibility of a move higher from the spx. > > something to keep tabs on. that's dan deming of stutland equities. > > thanks angie. that's it for today. coming up tomorrow, james bond is back. find out if "skyfall" will be a "killer" at the box office. from all of us at first business, have a wonderful wednesday!
our economy is recovering. a decade of war is ended. a long campaign is now over. >> president barack obama is elected to a second term winning a decisive victory in his heated battle against mitt romney. >> celebrations all over the bay area as the presidential race is finalized. >> we are live in san francisco where it looks like governor jerry brown's tax hike to help california schools has passed.
good morning. thank you for joining us. today is november 7th i'm pam cook. >> and i'm brian flores. a lot of action last night. a lot to catch up to this morning. steve. >> yeah we have a couple days of sunshine and warm weather. fog is back. inland it will still be sunny but temperatures coming down with a westerly breeze. leading edge of our bigger change is leading into the pictures. 60s and 70s. here is sal. traffic is doing pretty well around the bay area. as a matter of fact we are looking pretty good in most areas. also the morning commute looks good if you are driving on 880 north and southbound. let's go back to the desk. topping our news this morning president obama will have a second